Korean cosmetics lose US$5.4B due to MERS
SOUTH KOREA — Growing concerns over the Middle East respiratory syndrome outbreak in South Korea are taking a toll on the local cosmetics industry, with a growing number of Chinese shoppers cancelling their trips to the nation, according to market observers.
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More than 200,000 foreigners — mostly from China and Taiwan — cancelled their visits to Korea this month, apparently due to the epidemic of the virus, said the Korea Tourism Organization.
Analysts say if the drop in tourists continues, it can deal a serious blow to the entire local cosmetics industry, which heavily draws on sales from duty-free shops. The duty-free shops‘ sales currently account for more than 40 per cent of the total local cosmetics sales.
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Local beauty firms, including AmorePacific and LG Household & Health Care, have lost more than 6 trillion won (US$5.4 billion) in combined market value since the first outbreak of MERS on May 20. Korea’s largest cosmetics firm AmorePacific has seen its shares drop by 9.1 per cent during the period.
“We have seen a decline of more than one third of our Chinese shoppers. This has, for sure, significantly affected our sales figures,” said an employee of a local duty-free shop, declining to be identified. KS
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